Sub-Saharan Africa: Coca-Cola Unveils Plan to Grow Juice Business
By Staff Writer
Nairobi – Coca-Cola Central East and West Africa has announced a robust plan to become a fully integrated juice company in a push to become the market leader in the juice category in Sub-Saharan Africa region.
The company’s General Manager for Still (non-carbonated) Beverages for Central East & West Africa, Lionel Marumahoko told a media briefing that this effort entailed sourcing of raw materials (fruit) locally, partnering with local fruits processors as well restructuring its juice bottler – Beverage Service Kenya (BSK).
“We have built a strong foundation for this shift in strategy since last year when we entered into a partnership with the Gates Foundation to work with 54,000 small-scale farmers of mango and passion fruit in Kenya and Uganda to join our supply chain. We now have firm grounding for our strategic shift as we gear up to become the market leader in juice & juice drinks category regionally,” he said during a plant tour and press briefing at Beverage Services Kenya in Nairobi’s Industrial Area.
He said the company had entered into a partnership a local juice processor to receive and process the fruits from the farmers into Puree (the raw material for juices) and was in the process of setting up another processor in Uganda by October this year.
In this backward integrated model, the farmers deliver their produce to the processor which in turn delivers the puree to the juice bottler (BSK) for final manufacture and packaging into ready to drink juice & juice drinks.
“This end to end integration is what we call from grove to glass. It explains the shift from our previous model where we imported the raw material from the world markets. This change will deliver significant cost efficiencies as well as enhance our responsiveness to ever changing consumer taste needs.”
Marumahoko said The official said small scale fruit farmers project dubbed Project Nurture has so far recruited, trained and funded 15,300 farmers in Kenya earning them Sh150 million in the past 12 months after supplying over 7.3 tons of mango and passion fruits to the company. In Uganda, the over 8,600 farmers who have been recruited earned just over Sh5.3 million.
Marumahoko said that although the local juice market is fragmented and led by only a few players, a wave of positive macroeconomic factor and social dynamics present a huge opportunity for the growth of juice.
“Growing consumer sophistication, increasing youth population and burgeoning demand for nutrition and energy drinks underpinned by a strong competitive landscape provide the platform to aggressively drive our juice agenda,” he said adding that Kenya has witnessed a steady increase in consumption of fruit and vegetable juices by 3 per cent in volume annually.